Congo Wikis

Monday, December 22, 2008

On Mining Renegotiations, Confusion Reigns

Two days after Victor Kasongo announced that mining contract revisions had been completed for all but six major companies operating in the DRC, some of the companies said by the government to be uncooperative deny that they were even contacted!

So far three of the six companies accused by DRC Deputy Mines Minister Victor Kasongo as having ‘walked away' from contract renegotiation talks have denied the accusations.Author: Lawrence WilliamsPosted: Sunday , 21 Dec 2008

LONDON -

So far three of the six companies accused by DRC Deputy Mines Minister Victor Kasongo of having walked away from mining contract negotiations with regard to the DRC Government's Mining Contracts Review have refuted the allegations. The companies reported by Reuters as having arbitrarily withdrawn from the contract negotiations were Freeport McMoran Copper and Gold, Gold Fields, AngloGold Ashanti, First Quantum, Mwana Africa and Banro (see DRC says Freeport, Gold Fields, Anglo, FQM have walked away from contract renegotiations.)

AngloGold Ashanti's DRC subsidiary claims that the company did not withdraw from the discussions when negotiations were suspended in October. The company claims it was asked to wait by the government and that they would be contacted for resumption, but so far no call has come. The company re-affirmed that it is available for negotiations at any time.

Likewise, Mwana Africa gave a similar account saying the company was waiting to be contacted again by the government to be invited to resume talks.

Strangest of all, perhaps, is the case of Banro, the gold developer, which has told Mineweb that the company does not have a contractual relationship with a state-owned mining company in the DRC and was not even among the 61 companies that were part of the mining contract review process. The Company has a Mining Convention with the government of the DRC.

"The only issue we have been contacted about" said Martin Jones, the company's spokesman, " is an issue regarding surface taxes related to our Mining Convention, an issue that is clearly spelled out in Banro's favour in our Mining Convention. These talks were progressing in good faith and at no time did the Company quit the talks or indicate that it would do so."

The DRC mining review has been going on now since April 2007 and covers some 61 mining contract awards with the results having been delayed several times now. It was originally supposed to have been completed in six months. According to Kasongo's reported statement to Reuters the review is now in effect complete, but final negotiations still need to be concluded with the companies noted which amount to "a huge chunk of our resources. We want them to sit at the table and finish this thing. It's not the intention of the government to cancel them."

The problem for the miners waiting for the final results of the Contract Review to be made public is the longer the deliberations continue without a conclusion, the more uncertainty reigns - and with the current credit crunch and global financial crisis where raising money for mining projects is, to say the least, proving to be extremely difficult, those affected by any degree of uncertainty at all are finding the process truly impossible. As a result the DRC's redeveloping mining sector, which promised so much only a year or so ago, seems to be collapsing apart from projects like Freeport's huge Tenke Fungurume copper/cobalt mine where over $1 billion has already been spent to build one of the world's largest base metals mining operations.

One hopes that the latest statement from the DRC Government just indicates some communications confusion between the companies concerned and the Mines Ministry rather than anything more sinister.

About Me

David grew up in Ibadan, Abidjan, and Montreal. He is based in Kinshasa where he works on a public health project. He has published articles and essays on the Congo in the New York Times, the Washington Post, the Chicago Tribune, The New Republic, Dissent, and elsewhere.